Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Top UK companies expect COVID-19 to cut sales by a fifth: Deloitte

Published 05/04/2020, 02:21 AM
Updated 05/04/2020, 02:40 AM
© Reuters. FILE PHOTO: People walk through the Canary Wharf financial district of London

© Reuters. FILE PHOTO: People walk through the Canary Wharf financial district of London

By David Milliken

LONDON (Reuters) - Britain's largest companies expect the coronavirus to reduce their sales by more than a fifth this year and are gloomier than during the 2008-09 financial crisis, according to a survey published on Monday by accountants Deloitte.

The quarterly survey of chief financial officers at more than 100 of Britain's largest businesses showed the biggest drop in confidence since it began in 2007, and the lowest risk appetite since the global financial crisis in 2008.

"CFOs expect the lockdown to ease in May and June and demand in their own sectors to start recovering later this year. But there is no expectation of a quick snap-back in activity," Deloitte's chief economist, Ian Stewart, said.

Britain's government announced a lockdown that closed most non-essential businesses to the public on March 23, and is due to review the restrictions this week - though officials have said it is probably too soon for major changes.

Most CFOs do not expect revenues to return to pre-crisis levels for at least a year, Stewart said. This year, CFOs on average expect sales to be 22% lower than they had forecast before the coronavirus hit Britain.

Last month, British government forecasters published a scenario which showed economic output falling by more than a third in the second quarter, and dropping by 13% over the course of 2020 as a whole.

Nearly 30,000 people have died so far in British hospitals and care homes, one of the highest death tolls in Europe.

The British Chambers of Commerce on Sunday called on the government to set out clearer health and safety rules and ensure sufficient supplies of face masks and gloves before telling businesses to reopen.

Under the current rules, some British people can still go to work if they cannot work from home, but must stay two metres apart from colleagues where possible. Customers are not allowed on the premises of firms selling non-essential goods and services.

Official figures last week showed that a quarter of businesses of all sizes reported that their sales had more than halved due to the lockdown.

The Deloitte survey showed that among large companies, 59% were using or planned to use a government job guarantee scheme that pays staff 80% of their wages, similar to the proportion for other firms.

© Reuters. FILE PHOTO: People walk through the Canary Wharf financial district of London

Some 30% of companies said they had used, or planned to use, the Bank of England's Covid Corporate Financing Facility (CCFF), which so far has lent 15.9 billion pounds ($19.9 billion) to large companies which had an investment-grade credit rating or similar before the crisis.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.